New World’s compensation to Pavilia flat buyers may slash valuations and cut the bank loans available to mortgage borrowers
- More than half of the buyers chose a cash payment method, in which the purchase is fully settled within 180 days of the contract
- The remaining 417 buyers, making up 48.9 per cent of the purchase, chose to pay only when construction is completed, according to data by mReferral
Slightly more than half of the customers who bought the 852 apartments at The Pavilia Farm III chose a so-called cash payment method, in which the purchase is fully settled within 180 days of the contract. The remaining 417 buyers, making up 48.9 per cent of the purchase, chose to pay only when construction is completed, according to data by mReferral.
“Banks may deduct the compensation from the loan amount, so buyers who already have the mortgage may need to make up the difference in the first instalment,” said Raymond Chong, founder and chief executive at Starpro Agency.
Banks may revalue their mortgages when the flats are delivered to buyers, now delayed for nine months until March 2024 for blocks 1 and 8. Any decline in the valuation will lead to a corresponding reduction in the mortgage loan available, Chong said. Still, the chance of this happening is slim, because the apartments at The Pavilia Farm III, which start from HK$6.76 million and go up to HK$24 million (US$3.1 million), are low enough that any adjustment would not affect the mortgage by much, he said.
